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Stock Market/Transcript
Transcript Text reads: The Mysteries of Life with Tim and Moby A robot, Moby, is sitting at a desk. He is wearing glasses, a suit, and a tie. He is reading a newspaper. A boy, Tim, walks up to him. TIM: Whoa! Nice suit. Moby puts down his newspaper, removes his glasses, and hands Tim a sheet of paper. Tim reads from a typed letter. TIM: Dear Tim and Moby, What's a stock market? From, Jin. TIM: Good question. A stock market, or stock exchange, is a place where stocks are bought and sold. The two biggest exchanges in the United States are the New York Stock Exchange, the biggest stock market in the world, and the NASDAQ, a newer stock exchange that includes a lot of technology companies. An image shows the New York Stock Exchange Building. MOBY: Beep. TIM: Stocks are shares of a particular company that that company sells to the public. A pie chart represents public and private shares of a company. TIM: This is a way for the company to raise money to do stuff like build more factories, develop new products, buy other companies, and hire more workers. A person who owns stock is called a shareholder or an investor. An animation represents an investor exchanging money for shares in a company. MOBY: Beep. TIM: Right. That's where the term trade comes in. Investors trade their money for a share of the company's stock. And the people who make those trades are known as stockbrokers. A stock exchange is full of brokers, constantly making deals. An image shows the trading floor of a stock exchange. It is crowded with busy stockbrokers. MOBY: Beep. TIM: Well, not just anyone can buy or sell shares. Brokers have licenses that allow them to take orders from their customers to buy or sell stocks. An animation shows a stockbroker going through a metal detector as a security guard watches. Then Moby goes through the metal detector and activates the alarm. TIM: In a traditional stock market like the New York Stock Exchange, brokers do the work of buying and selling for you. They get a commission, a percentage of the sale price, in return for doing that. An animation shows a woman buying stock from a stockbroker over the phone. TIM: On the NASDAQ exchange, all of the buying and selling is done through computers. An animation shows a row of NASDAQ stockbrokers at their computers. MOBY: Beep. TIM: Well, working in a stock exchange means that brokers can watch what's going on in the market from moment to moment. An animation shows stockbrokers watching an electronic stock ticker. The screen continually shows the current values of various stocks. TIM: If something happens, like a company announces good or bad news, brokers working in the exchange can react right away, buying and selling shares in an instant. Text on the stock ticker reads: News Flash, X-Corp Announces Third Quarter Loss. The stockbrokers all hold up signs that read: Sell! MOBY: Beep. TIM: Right. When people refer to the market, or the stock market, they're usually talking about how the market is doing overall, whether it's up or down. An image shows a green arrow and a red arrow. The green arrow is pointing up, and the red arrow is pointing down. MOBY: Beep. TIM: No, looking at every stock separately wouldn't be practical. There are groups of really big companies known as indexes. Brokers look at an index to gauge what's going on in the market as a whole. There are several indexes you may have heard of. The Dow Jones Industrial Average is made up of the stocks of thirty major companies like Coca-Cola, American Express, McDonald's, and Johnson and Johnson. Text reads: Dow Jones Industrial Average. Images show a six-pack of soda, a credit card, an order of French fries, and a band-aid. TIM: When their prices move, it's a pretty good indication of how the overall market is doing. The Standard and Poor's 500 is another index on the New York Stock Exchange. And the NASDAQ Composite Index is a listing of over 3,000 stocks on the NASDAQ, like big technology companies Microsoft and Amazon.com. Text reads: NASDAQ Composite. Images show a desktop computer and a pile of books. MOBY: Beep. TIM: You want to create your own index? MOBY: Beep. TIM: Of robot manufacturers. Yeah, I don't know how useful that would be as a predictor of the market. MOBY: Beep. TIM: Yes, I know. Robots will take over the world someday. Category:BrainPOP Transcripts